Top US stocks to watch before the bell: Alibaba, Boeing and Disney

Alibaba secures over 1 billion customers, Boeing gets the green light for electrical fix, Tesla stops accepting bitcoin, dating app Bumble beats forecasts, Sonos ups expectations, and we tell you what to expect when Disney, AirBnB, Coinbase and DoorDash release results after the market closes.

USA (1)

Alibaba

Alibaba beat expectations in the first quarter as it continued to reap the benefits of increased shopping online, allowing it to reach a landmark milestone of having over 1 billion active consumers around the world by the end of March.

Revenue soared 64% in the three months to the end of March, representing the fourth quarter of its financial year, to RMB184.6 billion, coming in ahead of the RMB180.41 billion expected by Wall Street. Annual revenue rose 41% to RMB717.3 billion. Its net loss of RMB5.48 billion turned from a RMB3.16 billion profit the year before.

The results come in the wake of the regulatory crackdown on the company in China following a speech by its founder Jack Ma last year, as well as the suspension of the IPO of Ant Group.

Boeing

Boeing has secured the backing of US regulators for its proposed fix of electrical problems that has grounded around 100 737 MAX airplanes, clearing the way for them to return to service swiftly.

Notices on how to fix the problem were sent to carriers yesterday, hopefully allowing them to resume flying before the anticipated pick up in travel this summer as restrictions are eased. Boeing also said it was preparing to resume deliveries of new aircraft as a result.

Southwest Airlines, American Airlines and United Airlines are among the most impacted by the problems, with the trio having put around 60 planes out of service as a result of the fault. Boeing has said the problem should take three to four days to fix.

Tesla

Tesla has decided to stop accepting bitcoin as a form of payment for its electric cars only two months after announcing it would let customers pay using the cryptocurrency.

The company cited environmental concerns stemming from the power used to mine the coins as the reason for the decision, which caused bitcoin prices to plunge.

Tesla revealed it had bought $1.5 billion worth of bitcoin back in February and sold-off a portion for a profit soon after, but said this was to demonstrate bitcoin as a viable and alternative way of holding value on the balance sheet rather than a long-term strategy.

Moderna

Australia is in talks with Moderna about setting up manufacturing facilities in the country to produce its coronavirus vaccine.

The country ordered 25 million doses of Moderna’s jab yesterday and has pledged to spend AUD1.5 billion on improving manufacturing across six sectors, including pharmaceuticals. It hopes producing the jab in the country will give it a more secure supply of vaccines, including new ones that will be made to tackle new variants.

Bumble

Bumble on Wednesday posted a stronger than expected outlook after beating forecasts in the first quarter of the year.

The company, which runs its online dating app, said paying users jumped 30% in the quarter to 2.8 million, delivering a 40% jump in revenue to $170.7 million, well ahead of the $164.6 million expected by analysts. Net earnings of $341.8 million compared to a $55.8 million loss the year before.

Bumble said it expects revenue in the second quarter to be between $175 million and $178 million, ahead of the $174.4 million forecast by Wall Street.

Canada Goose

Canada Goose Holdings said demand has now exceeded pre-pandemic levels as it reported record revenue in the fourth quarter of its financial year that came in ahead of expectations.

Revenue jumped almost 34% to CAD208.8 million, ahead of the CAD164.8 million expected by analysts. Online sales grew by 123% year-on-year and direct-to-consumer revenue in China more than doubled. Net income stayed broadly level at CAD2.9 million from CAD2.5 million.

Canada Goose said it expects to deliver annual revenue of over CAD1 billion for the first time in the new financial year from CAD903.7 million in the recently-ended financial year to March 28.

Sonos

Sonos on Wednesday raised its outlook for the rest of the year after reporting strong topline growth during the second quarter of its financial year.

The speaker company said revenue was up 90% in the quarter to $332.9 million and turned to adjusted Ebitda of $48.5 million from a $28.4 million loss the year before. Net income was $17.2 million compared to a $52.3 million loss.

Sonos said it now expects to report annual revenue of $1.625 billion to $1.675 billion, equal to 23% to 26% growth, faster than the 9% to 13% growth previously expected. Adjusted Ebitda should be between $225 million to $250 million, more than double the previous year, compared to its previous target of $195 million to $225 million.

Alphabet

Alphabet’s Google has been fined EUR102 million, roughly around $123 million, for excluding an e-mobility app developed by Enel from its Android operating system.

Enel’s JuicePass has not been allowed to operate on Android Auto, Google’s system that lets apps to be used safely in cars, in order to favour Google Maps, regulators in Italy said. Regulators have also asked Google to now include JuicePass.

Google said it ‘respectfully disagrees’ with the decision and said it is deciding on what steps it will take next.

Seven & i

Activist investor ValueAct Capital is reported to have taken a significant stake in Seven & i Holdings, the Japanese owner of the 7-Eleven chain, according to Reuters.

ValueAct has built up a 4.4% stake in the business and has said it believes Seven & i would be worth more by breaking up compared to its current market value, according to a letter sent to investors. The hedge fund believes the business could be worth as much as double its current value if it restructured itself to focus on its convenience store or if it decided to spin-off 7-Eleven.

McDonalds

McDonalds has said it is raising average hourly pay by 10% across the 600 restaurants it runs across the US in an effort to attract more workers to help it capitalise as the economy reopens.

Notably, the pay rise will not be given to workers in over 13,000 franchised stores across the country. Still, around 36,500 members of staff are set to benefit, with entry-level crew set to earn at least $11 to $17 per hour whilst shift managers will start on $15 to $20.

It comes as McDonalds tries to hire 10,000 more workers over the next three months and as it works toward minimum average pay of $15 an hour across its company-managed outlets by 2024, up from around $13 at present.

JPMorgan, Wells Fargo and US Bancorp

Multiple banks including JPMorgan Chase, Wells Fargo and US Bancorp are planning on sharing their customer’s deposit accounts to help people with poor credit scores to access finance, according to the Wall Street Journal.

The plan is backed by a government initiative to bring more people into the world of mainstream finance. The move will mean people’s checking or savings accounts at other banks will be factored-in when applying for credit at other institutions, which should boost their chances of getting approved.

The report suggests it is targeting people who are financially responsible but have poor scores, with their previous financial history such as overdraft usage and balances still being taken into account.  

Citigroup

Citigroup plans to hire 1,000 wealth professionals in Hong Kong over the next five years as it looks to grow its assets under management in Asia by around $150 billion.

It has already hired around 75 private bankers and relationship managers since the start of the year and it wants to reach its target by 2025.

Citigroup currently has around $310 billion worth of assets under management in Asia at present. Net money inflows exceeded $20 billion in the first quarter to mark a record for the region, while $5 billion in net new money was added.

Disney

Disney will release second-quarter results after the markets close later today. The pandemic has thrown both disruption and opportunity at Disney. Theme parks and resorts are either closed or operating at reduced capacity, cruises remain docked and productions have been halted. Meanwhile, demand for its steaming services has surged with Disney+ having breached 100 million subscribers in March.

The focus will be on how well its streaming service has performed, especially after Netflix’s disappointing outlook a few weeks ago, and what the recovery potential of the rest of the business looks like as the economy reopens.

A Reuters-compiled consensus shows analysts are expecting Disney’s revenue and earnings to come in lower compared to both the previous quarter and the year before. Revenue is forecast to come in at $15.87 billion with adjusted EPS of 28 cents and reported diluted EPS of 1 cent.

AirBnB

AirBnB will release first-quarter results after the markets close today. Like any stock reliant on travel, AirBnB has suffered during the pandemic as people stay at home, but is a stock with huge recovery potential as the economy reopens and people start travelling again.

Analysts are expecting AirBnB to report revenue of $714.4 million and a net loss of $690.4 million. That would compare to the £859 million in revenue and whopping $3.9 billion loss booked in the fourth quarter of 2020.

Investors will want to see if the picture has improved since its last update and how bullish AirBnB’s outlook is.

Coinbase

Coinbase will release first-quarter results later this afternoon at 1400 PT, representing its first trading update since it went public in April.

The stock initially exploded upon listing as investors dived in to get a slice of the cryptocurrency platform and it ended its first day of trading at $328 per share, valuing it at around $85 billion. However, shares have struggled since then and are trading closer to $283 today.

Coinbase said it intends to provide financial guidance for the rest of 2021 today as part of the results.

DoorDash

DoorDash, the food delivery and takeout company that went public in December, will release first-quarter results later today.

Analysts are expecting DoorDash to report quarterly revenue of $993.3 million and a net loss of $95 million. That would compare to revenue of $970 million and a net loss of $312 million in the fourth quarter of 2020, with expectations that the company has been able to capitalise on increased demand for food delivery services during the pandemic.

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